Sales budgeting approaches
Student-written example
Shared for study and reference. Not a sample of our professional writing.
About this example
This assignment was contributed by a student. The views expressed are the author’s and do not necessarily reflect those of UKEssays. Use it to inform your reading and develop your own work.
Question
Discuss the various sales budgeting approaches that you can adopt for the sales department.
Answer
The sales budget represents the planned sales and revenues that a sales department expects to accrue over a certain period.
In planning and forecasting the sales there are a variety of methods that can be used. Some of these are related to standard statistical methods of forecasting, such as a simple percentage increase on previous figures through to multiple regression models.
A more specific method is to develop the plan based on the expectations of sales personnel, for example asking them the figures that they expect to achieve. This can make use of tacit knowledge and experience that cannot be captured through calculations, but does introduce the possibility for bias and gaming behaviours.
Another method is to incorporate input from customers. This approach is most applicable in business to business scenarios where there are a few major customers. In such cases this has the benefit of sharing the knowledge of the different companies and thus gaining a wider range of views in making the predictions. A downside is that securing the cooperation of the other companies may be difficult if they feel the information is strategically important. In other cases the customer firms may not have accurate predictions of how much they would purchase, or their methods for predicting this may be sub-par.
The best way to ensure accurate sales budgeting may be to combine a multitude of approaches in order to gain the benefits of each. However, this approach would be more complex, and also require more time.
References
UK Essays writing support
Need support with your own question?
Get help from our experienced academic writers. All hold at least a 2:1 degree from a reputable university, and most hold a master’s degree or PhD, and/or have teaching experience.
Send us your question and, if you wish, any marking criteria. We’ll write a model answer to your brief.
Cite This Work
To export a reference to this article please select a referencing stye below:
Related Services
View all
DMCA / Removal Request
If you are the original writer of this assignment and no longer wish to have your work published on UKEssays.com then please click the following link to email our support team:
Request essay removal